The 56-year-old’s exit comes amid pressure from investors over the Juul investment and weeks after the U.S. government filed an antitrust suit against Altria to unwind the deal. Altria shares are down about 30% over the past year.

He is being replaced this week by finance chief Billy Gifford. Mr. Gifford had been named acting CEO in March after his boss became ill. Mr. Willard is now recovering, the company said.

Altria said it was splitting the roles of chairman and CEO. Thomas Farrell, a board member and the CEO of Dominion Energy Inc., was named chairman.

Mr. Willard helped set the course for Altria’s mission to “lead the transition of adult smokers to a noncombustible future, Mr. Farrell said in a statement. “Our election of Billy as the next CEO reflects the board’s belief that his collaborative leadership style, strategic mind-set and deep financial and industry expertise are right to lead Altria towards that future.”

Earlier this year, Altria’s board decided not to pay Mr. Willard a bonus for 2019, citing the company’s performance and two big write-downs on the Juul investment that totaled more than $8 billion. Mr.Willard also pursued unsuccessful merger talks with rival Philip Morris International Inc. PM 2.11%

As part of his exit, the board has agreed to pay Mr. Willard a cash payment of $8.8 million in lieu of stock awards granted in 2018 and 2019, according to a securities filing. He will also receive a $537,900 payment for 2020.

Mr. Willard took Altria’s top job in May of 2018. He quickly set out to remake the tobacco giant where he had worked for more than two decades. He scrapped Altria’s e-cigarette efforts and engaged in discussions to buy a stake in Juul, a vaping startup that was taking Altria’s smokers.

The investment valued Juul at $38 billion. But since then, the e-cigarette maker has been battered by lawsuits, regulatory crackdowns and investigations into whether it marketed its products to children and teenagers. Blamed for a surge in underage vaping, Juul voluntarily pulled most of its flavors from the U.S. market and scaled back its international expansion.

In January, Mr. Willard said he was “highly disappointed in the performance of our Juul investment.” He cited a number of surprises, including a vaping-related lung illness that prompted U.S. health officials to warn consumers last year not to use e-cigarettes before they determined the illnesses were linked not to e-cigarettes but to vaping devices containing marijuana extracts and vitamin E oil.

He was pressed on the wisdom of the deal in February by shareholders and analysts in a private session at an analyst conference in Florida, according to a person who attended the event. Mr. Willard responded by noting that Altria had recently revised its agreement with Juul and the new deal had the full support of Altria’s board, this person said.

Under the revised agreement, Altria is no longer providing marketing and retail distribution for Juul as the companies had originally agreed. The new deal also gives Altria the option to launch its own e-cigarettes. At the end of December, Altria valued Juul at $12 billion and its own stake at $4.2 billion.

The Federal Trade Commission earlier this month sued Altria to unwind the investment in Juul, accusing the Marlboro maker of violating federal antitrust laws. Altria said it disagreed with the government and would defend its investment.